The Northern Territory government in Australia says it has been approached by nearly 50 Chinese companies looking to buy land to start donkey farms. Demand for donkey products, especially donkey-hide gelatin is increasing in China, while global supplies are falling.

The Northern Territory government has bought a small herd of wild donkeys for its research station near the outback town of Katherine. Earlier this a month of delegation of Chinese business people visited the facility, and up to 50 companies from China have expressed interest in buying land to set up donkey farms.

It is estimated there are up to 60,000 wild donkeys in the Northern Territory. Donkeys were brought to Australia from Africa as pack animals in the 1860s, and many were released when they were no longer needed. For years feral donkeys have been considered a major pest by farmers.The animals trample native vegetation, spread weeds and compete with domestic cattle for food and water.

Now the authorities believe there are economic benefits in captive donkey herds.

Alister Trier, the head of the Northern Territory's department of primary industry believes the donkey trade has a bright future.

"My feel[ing] is the industry will develop but it will not displace the cattle industry, for example, I just do not think that will happen.What it will do is add some diversification opportunities for the use of pastoral land and Aboriginal land in the Northern Territory," said Trier.

In China, donkey skins are boiled down to make gelatin, which is then used in alternative Chinese medicines and cosmetics.

Animal rights campaigners are pressuring the authorities not to allow the live export of donkeys to China, claiming that conditions in transit would be cruel and unacceptable.

Activists also insist that donkeys' health suffers when they are kept in large herds.

The Royal Society for the Prevention of Cruelty to Animals in Australia wants the donkey skin trade stopped altogether because of concerns the animals are being skinned alive overseas and treated with extreme cruelty.